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Leave travel allowance (lta) for director employees

Anupam (SWE) (26 Points)

10 September 2019

Reference: https://www.incometaxindia.gov.in/_layouts/15/dit/mobile/viewer.aspx?path=https://www.incometaxindia.gov.in/charts%20%20tables/list_of_benefits_available_to_a_salaried_person_final.htm&k=&IsDlg=0

LTA is taxable for Director Employees as per the above article. Is that true for A.Y 2019-2020 also? The article also says that employees with salary greater than Rs. 50,000/- will also have LTA as taxable.

Can any member here confirm if that is indeed the case?

Thanks and Regards.

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4 Replies

Kapadia Pravin (17249 Points)
Replied 11 September 2019

LTA paid to specified Employees are TAXABLE

The following employees are deemed as specified employees:

1) A director-employee

2) An employee whose monetary income* under the salary exceeds Rs. 50,000

*Monetary Income means Income chargeable under the head salary but excluding perquisite value of all non-monetary perquisites

1 Like

Suresh Thiyagarajan (Student) (3986 Points)
Replied 11 September 2019

1. Yes, from the AY 2020-21 Leave Travel Allowance (LTA) exemption u/s 10(5) will not be available to a specified employee who includes,
i) Directors
ii) an employee who has substantial interest (more than 20% voting power)
iii) an employee who has a salary more than Rs. 50,000 (excluding non - monetary value perks)
2. As per the above amendment, a director will be covered under the specified employee of the company and LTA provided to directors (any kind) will not be covered u/s 10(5) and thus it will form part of salary and will be taxable accordingly.
Please correct me if the above solution has an alternative view.